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Published March 6th 2023

The Big Consumer Finance Trends for 2023

How is the cost of living crisis changing the way consumers approach financial decisions, and what does this mean for brands in the financial services sector?

The finance industry is evolving and adapting to changing market conditions and consumer needs. 

From consumer anxiety triggered by the rising cost of living to technology transforming how we manage our money, in this post, we'll be exploring some of the most significant trends in finance for 2023 and what they mean for businesses. 

The cost of living crisis

The last three years have exponentially impacted consumer stability, raising concerns and anxiety around the topic of finances.

How is the rising cost of living and inflation impacting people's attitudes to spending and saving?

Online conversations discussing the cost of living exploded in 2022, with millions of individuals taking to the internet to share their thoughts and express concerns.

According to Google Trends, search interest in the cost of living reached a five-year high at the end of September 2022. And social data pulled with Brandwatch showed a 97% increase in conversations about the cost of living compared to the previous year.

Needless to say, the cost of living crisis was one of the most discussed topics in online conversations in 2022. 

It’s pretty clear that the cost of living crisis was one of the most discussed topics in online conversations in 2022. But what about 2023?

As seen on the chart, online conversations and search interest around the cost of living have declined towards the end of 2022, but that doesn’t mean the conversation is dying down. 

Several rounds of tech layoffs affecting global companies, pay cuts, a high inflation rate, and the costs of relocations (concerning those who had to relocate due to a job loss) are building up.

What’s driving the cost of living conversation?

We looked into the most popular categories in consumer discussions about the cost of living. How has the conversation changed in the last six months? 

While all five categories generated a lot of mentions, bills, overall, saw 43% more mentions in the last six months compared to the previous six-month period. Rent also saw a high increase in discussions, with 14% more mentions between August 1 2022 - February 1 2023 compared to the previous six months. 

We used Brandwatch’s Social Panels to understand the differences in how different generations discussed the cost of living crisis in the last six months, and there were subtle differences. 

When looking at all generation-categorized mentions, gas was the most discussed topic by baby boomers and Gen X; rent was most frequently mentioned in conversations among Gen Y and Gen Z. 

Consumer behaviors: Saving and spending

Cost of living increases will likely continue to play a major role in consumers' purchasing decisions in 2023. And with rising prices for food, rent, gas, and bills overall, consumers are looking for ways to save money. 

Social media conversation around saving has seen an uptick since the beginning of the pandemic, peaking towards the end of 2022. 

What did consumers discuss in conversations about saving money?

When it came to saving money, consumers most often mentioned food, cars, technology products, and travel. It's no surprise that when we visualized consumer conversations about saving, such words as discount, deals, code, coupon, and promo were prominently seen on the topic cloud.  

Spending: Payment methods

We analyzed popular payment methods, from credit and debit cards to “buy now, pay later” options, to understand the public sentiment towards each payment method.

Before we dive in, it’s important to note that brands in the financial services sector tend to receive higher percentages of negative mentions than brands in other sectors. Consumers are a lot more inclined to mentions financial brands when they are dealing with a problem.

Our sentiment analysis of the payment method conversation revealed that by volume of mentions, credit cards saw the most negative mentions shared between January 1 - December 31 2022. In those conversations, consumers often mentioned that they’ve maxed out on their credit cards and discussed their credit card debts. 

And some consumers argued that it’s a lack of self-control that has pushed people to accumulate credit card debt. 

In the last three years, many online retailers have improved customers’ digital shopping experience, such as introducing 1-click buying and expanding delivery and payment options. As the result, simplifying the checkout process helped retailers to fight cart abandonment, pushing more consumers to buy online more often.

Looking back at our sentiment chart, buy-now-pay-later brands like Sezzle, Shopify’s Shop Pay, and Affirm saw the least amount of negativity in conversations mentioning these brands. However, one of the biggest concerns relating to “buy now, pay later” consumers expressed online was the same: If mismanaged, buying now and paying later can lead consumers to overspend on items they wouldn’t normally buy, thus significantly affecting their financial wellness. 

Buy now, pay later

One way to help consumers ease into making a transaction – and potentially make them feel like they are paying less and can afford more – is to offer them to purchase goods on credit and pay the rest in installments.  

The pandemic has accelerated the shift to digital payment, leading to a proliferation of such options for consumers called “buy now, pay later” or BNPL. And a growing number of consumers are embracing this payment method. With the rising costs across all sectors, BNPL has become a necessary form of payment, as it reduces the burden of consumers to make large one-time payments or pay a high-interest rate on credit cards. Last year’s report from Experian, one of the largest consumer credit reporting companies, said that four in five shoppers turn to buy now, pay later to avoid credit card debt.

We looked at the popular BNPL payment options to see how they were discussed in the last six months.

While Clearpay/Afterpay and Klarna saw significantly more brand mentions than other payment methods in the last six months, social data showed that Affirm saw a 144% increase in brand mentions, followed by PayPal, with 43% more brand mentions. 

Affirm’s rapidly growing popularity can be explained in part by the flexibility of this payment method. For example, with the Affirm app, consumers can shop online and in-store. With Affirm, the amount due at purchase can be as low $0, and for high-ticket items, consumers can set up monthly installments across three, six, or even twelve months. This seems to be something consumers have taken to social media to discuss lately.

Final thoughts 

The anxiety around the cost of living crisis and instability isn’t going anywhere. And depending on how you choose to look at it, it presents both challenges and opportunities for brands in 2023. 

Considering consumers’ increasing concerns around prioritizing and paying everyday expenses, it seems there’s a greater need to stimulate consumer interest for brands in the financial services sector.

The current economic climate is making consumers vulnerable, and vulnerable consumers are looking for ways to get a better grip on their finances to get stability. Some people resort to BNPL options to relieve some of that anxiety when making a purchase, while most of us are actively thinking about how to save money on things like food, technology products, and traveling. 

Interestingly, we also see an increase in people wanting to learn about personal finances. In conversations about learning and education, we analyzed social mentions containing money, budget, finance, and savings. In the last six months (between August 1 2022 - February 1 2023), 1.76m unique authors (a 22% increase) discussed topics relating to personal financial literacy compared to the previous six-month period.  

What does this mean for brands in the financial services sector?

Brands that are looking to develop new products and attract new customers need to consider vulnerability and incentivize consumers in a way that makes sense in the given situation. 

For example, some brands may want to consider financial incentives. 

Brandwatch image
Slide right for more examples
Brandwatch image

Other brands in this sector may want to focus on customer experience and building strong customer relationships. As such, financial sector brands can develop solutions to alleviate consumers’ financial anxieties and teach them how to regain and maintain economic confidence.  

Looking at the examples in the slider, Barclays promoted a guide teaching consumers how to develop healthy spending habits and maintain a budget. A similar initiative came from Morgan Stanley, which targeted women with its financial planning initiative. And Ally Bank offered its customers to connect with a financial goal planner free of charge. 

This type of customer-centric marketing can help organizations inspire customer loyalty, which can attract more customers.

Brandwatch image
Slide right to see more examples
Brandwatch image
Slide right to see more examples
Brandwatch image

Discover more insights in our Consumer Trends report.

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Consumer Trends for 2023

Discover the latest trends in health and wellness, the cost of living crisis, consumer shopping behavior, and much more..

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